Sacramento Update October 2024
Governor Newsom concluded actions on September 30 on the 1,206 bills that made it to his desk in the final days of the 2024 legislative session. He signed 1,017 and vetoed 189, making his veto rate 15.7% - higher than average for him over his tenure. Many of the bills were vetoed due to state costs and others were rejected due to disagreements on policy.
SB 278 (Dodd) was vetoed, which is a victory for the industry. It would have required financial institutions to establish “emergency financial contact” programs for elder and dependent adults and requires financial institutions to delay transactions by these accountholders by three days if there is a reasonable suspicion of financial abuse. Due to concerns regarding preemption for federally chartered banks, CCBN secured an amendment to SB 278 that specified that if the bill is found not to apply to federally chartered banks, it won’t apply to state-chartered institutions either. Newsom vetoed the bill due to concerns with the 3-day hold and seniors’ access to their funds, as well as concerns with the enforcement provisions. Although the bill is dead for now, the sponsors may be inclined to reintroduce it in a future session.
Newsom also signed the following bills that impact community banks:
AB 3100 (Low), which requires residential conventional mortgages with multiple borrowers to include provisions to allow for any of the existing borrowers to buy the property interest of another borrower by assuming the seller’s portion of the mortgage if the assuming borrower qualifies for the underlying loan. The goal of the bill is to assist parties in a divorce who want to assume a mortgage without having to go through the refinancing process. CCBN and other financial services stakeholders worked with the author to make the bill workable for lenders.
AB 2618 (Chen), which extends, until January 1, 2031, the authority for a local agency to invest up to 50% (rather than 30%) of its surplus funds in deposits at a commercial bank, savings bank, savings and loan association, or credit union. AB 2618 maintains flexibility for local agencies and banks as they work together in managing local agency funds and in serving their communities. CCBN supported this bill.
Sb 1286 (Min), which expands the scope of the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) to cover certain commercial debt, providing certain debtors with protections from harassment and other prohibited collections activities. CCBN had concerns with this bill given that consumer and commercial debt are very different.
SB 1072 (Bradford), which limits the amount of nonsufficient funds and overdraft fees that a credit union may charge and requires a credit union to provide a notice to a member each time the credit union assesses such a fee.
AB 1871 (Alanis), which adds personal financial literacy for the course of study in social sciences for grades 7 through 12. CCBN supported this bill.
The Legislature is in recess until new members are sworn in on December 2.